Shares of
Ford Motor
caught a reluctant downgraded Monday. One of the Detroit-three stocks is a better bet.
Monday, Jefferies analyst Philippe Houchois downgraded Ford (ticker: F) stock to Hold from Buy. His price target went to $15 a share from $17.
The cut has Ford shares are down 1.2% in early trading, while
S&P 500
and
Dow Jones Industrial Average
futures are both up about 0.1%.
The drop adds to recent losses. Ford stock dropped about 5% this past week after the company reported second quarter results. Numbers were better than expected earnings, but the company pushed out some EV goals farther into the future. Ford now sees making EVs at a rate of roughly 50,000 a month by the end of 2024 instead of the end of 2023.
Slowing down EV production growth will also slow EV losses at Ford’s EV division dubbed Model e. “However sensible it is to slow down the pace of loss-making [generation one] sales to preserve returns, the change in Model e guidance is a
setback just a few weeks after [Ford’s] May 22 Investor Day,” wrote Houchois, adding in the report “With a heavy heart, we cut Ford to Hold.”
He calls shares of Chrysler parent
Stellantis
(STLA) the best bet of the Detroit-three.
General Motors
(GM), Ford, and Chrysler are the original D-3 auto makers. Chrysler’s brands such as Jeep and Ram are now part of the European auto giant.
“Stellantis shares performed well post results but its low valuation multiples remain quite attractive,” wrote Houchois. Stellantis reported better-than-expected numbers on July 26. Shares are up about 11% since then, but they still trade for less than 4 times estimated 2024 earnings per share. Ford stock trades for about 7 times. GM shares trade for less than 6 times.
Houchois rates Stellantis shares Buy and has a $25.30 price target for the stock. He rates GM stock Hold and has a $39 price target for the stock.
Overall, 56% of analysts covering MGM stock rate the share Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. About 82% of analysts covering Stellantis shares rate them Buy. The Buy-rating ratio for Ford stock is about 35%.
The average analyst price target for GM stock is about $49 a share, up almost 30% from recent levels around $38. The average target price for Stellantis shares is about $25, up about 25% from recent levels around $20. The average target price for Ford shares is about $14.60. They recently closed at $13.26.
Write to Al Root at [email protected]
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